It's better to focus on having a single layer of government and maintaining the three institutions it relies on to achieve the checks and balances than try to support single institutions of different levels of government.
The city and state governments are the same things but abstracted differently. Choosing which layer to use should primarily revolve around the setting of the roleplay environment. Since the map revolves around a single city and a single county, it's best to go with a city/county government.
I understand in many cases; some laws would realistically be state laws and not city laws. However, if we're going through the trouble of maintaining elections and a player-based legislature, they should have a say over all laws imposed on the players.
An easy way to deal with this is to say that the NPC senate would automatically accept the city council's resolution expressing change to state law. The governor's signature would be management's approval since the penal code often has OOC implications which affects the illegal community; therefore, it's best for management to look at anything changing it. I think this is what @Maximis saying above.
I can't stress enough what a waste of time and unnecessary OOC drama we had to go through in the "other community" due to having two layers of government. It's much more efficient to just work on one layer of government and leave it at that.